Russians will no longer be able to access Microsoft cloud services, business intelligence tools

Microsoft will reportedly suspend access to its cloud services for Russian users this month as a result of European sanctions imposed on Russia after its invasion of Ukraine.

The Russian tech firm Softline, one of the largest distributors of Microsoft products in the country, said in a statement last week that local users will lose access to the cloud services provided by Microsoft on March 20. 

Softline also shared a letter it received from Microsoft in the private Telegram channel it created to help clients transition to a local software provider. Several other local tech companies confirmed to Forbes Russia that they too received a warning email from Microsoft. Softline shared a similar letter from Amazon.

On Monday, Softline released another statement, saying that according to unofficial information from Microsoft, the company is discussing postponing the suspension of its services in Russia until the end of the month. Microsoft has not responded to a request for comment about moving back the suspension timing.

“This does not cancel the imposed restrictions, but it gives a realistic timeframe to collect the data and set up the operation of an alternative infrastructure,” Softline said.

According to Microsoft’s letter to its Russian customers, the latest restrictions were adopted in response to European Union sanctions that prohibit Microsoft from supplying certain management or design software, including cloud-based solutions, to entities incorporated in Russia.

On Tuesday, Softline published the entire list of products that would be banned in Russia, based on information the company reportedly received from Microsoft. This includes popular business intelligence tools such as Power BI, as well as Microsoft’s Azure services, SQL Server, OneDrive and PowerShell.

To avoid "complete or partial loss of information," Softline recommends that all Russian companies back up data associated with cloud services provided by foreign vendors. Softline also offers assistance in migrating to domestic alternatives, including Yandex 360, SaaS VK, and Softline Universe.

A slow withdrawal

With the start of the war in Ukraine two years ago, many Western tech firms announced that they would quit the Russian market or suspend selling services there — either for moral reasons or due to economic sanctions imposed on Russia by the EU or the U.S.

Big tech companies that served many clients in Russia didn’t exit the market immediately.

“Microsoft warned about the restrictions in advance, providing the opportunity to transfer data and make backup copies," said Nikolai Komlev, director of the Russian Association of Computer Technology Manufacturers in an interview with Forbes. According to him, not every company did so. The U.S. software giant Oracle "left more abruptly, along with prepaid licenses," which led to "litigation between distributors, integrators, and end customers," he said.

Back in August, Microsoft announced that it would stop renewing licenses for its products to Russian companies and would not process payments via wire transfer to local bank accounts.

“We are coordinating closely and working in lockstep with the governments of the United States, the European Union and the United Kingdom, and we are stopping many aspects of our business in Russia in compliance with governmental sanctions decisions,” said Microsoft’s president, Brad Smith, in a statement released in the early days of the war.

In 2022, Amazon also suspended shipments of retail products to customers based in Russia and Belarus, blocked access to Prime Video, and announced that it would no longer accept new sign-ups from Russia and Belarus for its Amazon Web Services (AWS). The company said it has a “long-standing policy of not doing business with the Russian government.”

In response to a Recorded Future News request for comment, AWS said that it has not been allowing new Russian customers since March 2022, and these policies have not changed.

Even after foreign tech companies announced the decision to exit the Russian market, many local users didn’t rush to move to local alternatives. Microsoft was used by up to 90% of corporate and state clients in the country. 

Switching to Russian software means adapting to a new interface or changing the entire information technology infrastructure. Even seemingly simple things like file formats and fonts differ between Microsoft and Russian operating systems.

Local tech experts, however, criticized Russian users' reliance on foreign services. 

“Using Microsoft services, especially for data storage, was a short-sighted decision," said Alexey Smirnov, the general director of the company that developed the Russian operating system called Alt. "There was a risk, and it became a reality."

In certain industries, such as banking, there are simply no comparable Russian alternatives to what international companies like SAP and Oracle offer. Big Russian banks and financial services have even asked the government to delay switching to domestic technology until 2027 to allow them more time to rebuild their systems.

The sanctions would also likely impact the Russian construction industry, according to Ivan Sezin, advisor to the Russian law firm Denuo. A ban on the supply of foreign software may delay the process of digitization in these industries, Sezin told Forbes Russia.

To circumvent restrictions on the sale of these products in Russia, local government agencies and major corporations are reportedly acquiring banned foreign technology through intermediaries in other nations. For instance, despite tech giant Cisco leaving Russia a year ago, its networking gear is still making its way to the country through resellers in Asia and Turkey.